Cebu Pacific Air 2017 outlook: a second year of slow growth as Philippines leader waits for A321neo

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Cebu Pacific is planning another year of modest growth in 2017 as the Philippine airline group waits for the arrival of A321neos to unlock a new phase of expansion. Cebu Pacific's seat capacity was flat in 2016 and is projected to grow in the low single digits in 2017.

The slow rate of growth is very unusual for an LCC in a growth market. GDP growth in the Philippines is expected to exceed 6% in both 2016 and 2017, making it one of the fastest growing economies in Asia.

Cebu Pacific has been ceding market share to the Philippine Airlines Group but the disciplined approach to capacity has driven higher yields and profits. The slower growth and reduction in market share is part of the Cebu Pacific strategy as the group prefers to wait for the new generation high density A321neo, which is slated to be delivered from 4Q2017, to resume expansion.

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